By: DailyForex.com
The AUD/NZD has taken out the 12 month low set last October at 1.2519 kissing 1.2427 after the RBA cut its overnight cash rate to 3.25%, a move that has seen the AUD/USD drop some 74 points since the announcement earlier today. The AUD/NZD has stopped, possibly temporarily, at the Weekly S1, a level that matches the opens and closes of several weekly candles from July through September 2011 at 1.2431+/-. The most likely scenario at this point is that we see the pair drop to test the 2 year lows at 1.2315. If this level is breached, 1.2100 is within view and the next likely target considering the steady bullish march that the Kiwi has been on for some time with no signs of slowing after closing last month with a bullish engulfing candle on the monthly chart, a possible indication of a run for 0.9000. For the AUD/NZD, there is basically a technical vacuum below 1.2430 until we reach the Monthly S1/Weekly S2 at the 1.2350 area so traders will be looking for pullbacks to add to their shorts and profit taking along the way. To the upside we have Daily S1-S3 which are now resistance at 1.2479, 1.2455 & 1.2431 respectively. With little major resistance above until we get back up to the 1.2465 area this pair will probably remain bearish for the remainder of the week at least.
Happy Trading!
